SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[S]
( MARK ONE ) [C]
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
_________ EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
__________ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
[C]
Commission file Number
0-3305
NCC INDUSTRIES, INC
(Exact name of Registrant as specified in its charter)
[S] [C]
Delaware 62-0643336
(State or other jurisdiction of ( I.R.S. Employer
incorporation of organization) Identification No.)
165 Main Street, Cortland, New York 13045-5428
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 607-756-2841
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value per share
(Title of Class)
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes _X_ No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of RegulationS-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
l0-K or any amendment to this Form 10-K. _X_
The aggregate market value of the voting stock held by non-affiliates
of Registrant as of February 10, 1995 was $3,648,843.
At February 10, 1995, there were outstanding 4,375,492 shares of
Registrant's Common Stock, par value $1.00 per share.
Documents Incorporated by Reference:
NoneThe Exhibit Index is on page 48.
Part I
Item 1. Business.
General
NCC Industries, Inc. (hereinafter referred to as "Registrant")
is engaged in the foundation garment business, which consists of the design,
manufacture and sale of brassieres, panties and girdles.
Classes of Similar Products
The revenues from sales of brassieres and panties and girdles
during the years ended December 31, 1994, 1993 and 1992 were as follows:
<TABLE>
Year Ended December 31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 1993 1992
Net Percent Net Percent Net Percent
Sales of Sales Sales of Sales Sales of Sales
Brassieres $117,793,706 92.0% $101,866,614 92.1% $99,650,591 93.5%
Panties and
Girdles 10,248,716 8.0% 8,731,168 7.9% 6,956,819 6.5%
____________ ______ ____________ _____ ____________ ______
$128,042,422 100.0% $110,597,782 100.0% $106,607,410 100.0%
</TABLE>
Sales
Most of the items manufactured by Registrant are popularly priced,
but Registrant manufactures some budget priced and higher priced items.
Sales are made to department, specialty, discount and chain stores
throughout the United States.
Page 2
Registrant owns the following trademarks: "Lilyette," "Minimizer,"
and "Reflections." In addition, Registrant manufactures brassieres as a
sub-contractor under the trademark "Bill Blass". Registrant holds no other
trademarks, patents, licenses, franchises or concessions which it deems
material. During 1994, approximately 61% of Registrant's total sales were
made under Registrant's trademarks (as compared to 61% in 1993 and 60% in
1992), and substantially all of the balance of sales were made either under
customers' names or as u branded merchandise. Sales of Registrant's
trademarked products are made by 26 sales persons who are full-time
employees of Registrant and by five independent regional sales
representatives. Sales of Registrant's unbranded and customers' named
merchandise are handled by account executives of Registrant. During 1994,
approximately 18% of Registrant's total sales were made to Walmart, Inc.
("Walmart") (as compared to 16% in 1993 and 12% in 1992), approximately 17%
of the total sales were made to J.C. Penney Company, Inc. ("Penney")
(as compared to 20% in 1993 and 19% in 1992), approximately 10% of the total
sales were made to Mast Industries, Inc. ("Mast") (as compared to 8% in 1993
and 9% in 1992) and approximately 9% of total sales were made to Mervyn's
Department Stores, Inc. ("Mervyn's)(as compared to 9% in 1993 and 15% in
1992). Registrant has no contracts or agreements with any of Walmart,
Penney, Mast, or Mervyn's with respect to purchase of merchandise other than
standard purchase orders. Although Registrant has made substantial sales to
Penney and Mervyn's for many years to Walmart since 1990, and to Mast since
1989 there can be no assurance that Penney, Walmart, Mast or Mervyn's will
continue to purchase Registrant's products in the future, or that the sub-
contracting arrangement concerning usage of the "Bill Blass" trademark
will continue. The loss of any of Penney, Walmart, Mast or Mervyn's as a
customer, or a substantial decrease in their purchase of Registrant's
Page 3
products or the termination of the aforementioned sub-contracting
arrangement, could have a materially adverse effect on Registrant's
business. Registrant does not engage in significant sales in foreign markets.
Manufacturing Facilities and Purchases of Finished Good Registrant
manufactures a portion of its products in Registrant's plants located in
Cortland, New York, and Aguada, Puerto Rico. Registrant also utilizes
certain manufacturing facilities of Triumph International Overseas Limited
("Triumph") and certain of Triumph's affiliates and licensees in the Far
East and South America (see "Item 13. Certain Relationships and Related
Transactions") and utilizes independent sewing contractors located in the
United States, Puerto Rico and the Dominican Republic. During 1993 and 1994,
Registrant significantly expanded its relationship with its independent
sewing contractor in the Doninican Republic. Registrant provided loans to
such contractor to finance the expansion of its facilities to accomodate such
increased demand by Registrant. With regard to Registant's utilization of
Triumph's manufacturing facilities or those of independent contractors,
Registrant operates in three ways. Registrant cuts raw materials in its plant
in Cortland, New York and ships such cut materials to the Far East, South
America and the Dominican Republic for assembly by Triumph's respective
affiliate or licensee, or Registrant's independent contractors. The finished
products are either returned to Registrant for finishing, packaging and sale
to customers, or are finished packaged and shipped directly to the customer.
In addition, Registrant purchases finished goods from Triumph and its
affiliates, most of which are manufactured in the Far East, and from a non-
affiliated manufacturer. Registrant also ships uncut raw materials to an
independent contractor who cuts, assembles, finishes, and packages garments
and ships them directly to a customer.
Page 4
Sources of Raw Materials
Registrant purchases its raw materials from various domestic
suppliers. Three suppliers account for approximatel 30% of the raw
materials used by Registrant; however, Registran believes adequate
alternative sources are available for all it raw materials needs.
Working Capital
Historically, raw materials have been readily availabl from a number
of suppliers and it has not been necessary fo Registrant to maintain a
substantial inventory in order to fil orders. Registrant has been required
to maintain higher work-in process inventories than other domestic
manufacturers because substantial portion of the products that it
manufactures is cut at Registrant's main plant in the United States, shipped
to manufacturing facilities outside the continental United States for sewing
and then returned for finishing, packaging and sale. In addition, since
Registrant has experienced long lead times in obtaining merchandise from the
Far East and South America, Registrant carries higher inventories of
finished goods to meet its shipment obligations to customers. Registrant
endeavors to utilize its domestic production capacity to meet the short-term
needs of its customers. Registrant believes that its practices with respect
to working capital items are consistent with industry practices of companies
whose manner of production, shipment levels or manufacturing sites, as the
case may be, are similar to Registrant's.
Page 5
Backlog
Registrant's management estimates the dollar amounts of backlogs of
unfilled orders as of December 31, 1994 and December 31, 1993 were
$12,200,000 and $12,269,000, respectively. Registrant's management believes
that all orders received and unfilled as of December 31, 1994 are firm and
will be filled within the current fiscal year.
Competitive Conditions
Marketing efforts by Registrant during 1994 involved mainly catalog and
newspaper advertising of its products, including cooperative advertising.
While many factors can affect success in the marketplace, those which affect
Registrant's product lines include price, cost, quality, style, color, fit
and material content. Registrant's management believes that no single
factor materially affects its competitive abilities. Registrant endeavors
to use creative approaches in the design, manufacture and marketing of its
products, and to combine these elements in a manner which Registrant deems
suitable for success.
Management estimates that during 1994 sales by Registrant accounted for
approximately 6% of all domestic sales of brassieres, panties and girdles.
In the opinion of management, there are at least five companies which are of
larger size and which sell more brassieres, panties and girdles to the
retail industry in the United States than does Registrant.
Registrant has been advised by Triumph, its 84% stockholder, Guenther
Spiesshofer, its Chairman, and Frank Magrone, its President, that they have
entered into a non-binding letter of intent with Maidenform Worldwide, Inc.
("Maidenform"), a company also engaged in the foundation garment business,
pursuant to which Maidenform would acquire all of the shares of Registrant's
Common Stock, par value $1.00 per share ("Common Stock") owned by Triumph,
Mr. Spiesshofer and Mr. Magrone. See Item 12 - "Security Ownership of Certain
Beneficial Owners and Management".
Page 6
Employees
At December 31, 1994, Registrant employed 1710 persons, of
whom 1301 were production employees. The remainder of such employees
were engaged in sales, distribution, design and administrative activities.
Item 2. Properties.
The location, terms of occupancy and general character
of the principal plants of Registrant as of February 10, 1995 were
as follows:
<TABLE>
<S> <C> <C> <C> <C>
Area Expiration
(approx. Type of Date of
Location Sq.Ft.) Occupancy Lease Use
___________________________________________________________________________
Cortland, 150,000 Owned - Executive,
New York Administrative,
Manufacturing,
Warehousing, and
Distribution
Cortland- 155,000 Owned - Administrative,
ville (Subject to Manufacturing,
New York Installment Sal Warehousing , and
Agreement with Distribution
Cortland County
Industrial
Development
Agency)
New York, 15,525 Leased 05/31/03 Executive,
New Yor Administrative,
and Sales Office
Aguada, 32,233 Leased 05/31/99 Manufacturing
Puerto Rico Plant
Aguada, 23,082 Leased 09/30/02 Manufacturing
Puerto Rico Plant
</TABLE>
Page 7
Management of Registrant believes that it has accessibility to
production capacity to meet its current needs and its anticipated growth.
Triumph has agreed to make its facilities available to fill such purchase
orders as Registrant may from time to time submit (see "Item 13. Certain
Relationships and Related Transactions"). See also "Item 1. Business -
Manufacturing Facilities and Purchases of Finished Goods".
Item 3. Legal Proceedings.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Page 8
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
Registrant's Common Stock is traded in the over-the-counter market.
The Common Stock is only sporadically traded in such market and,
accordingly, the bid prices listed below do not necessarily represent actual
transactions. The per share range of high and low bid quotations, as
reported by the National Quotation Bureau, for each of the quarters during
the fiscal years ended December 31, 1994 and December 31, 1993 is as follows:
Year Ended December 31, 1994 .
Quarter Bid
1 High 6 1/2
Low 4 1/4
2 High 6 3/4
Low 6 1/2
3 High 6 3/4
Low 6 1/2
4 High 9
Low 6 3/4
______________________________________________________________________
Year Ended December 31, 1993 .
Quarter Bid
1 High 6 1/2
Low 4 1/4
2 High 6 3/4
Low 6 1/2
3 High 6 3/4
Low 6 1/2
4 High 6 3/4
Low 6 3/4
The prices set forth above reflect inter-dealer prices without
adjustment for retail markups, markdowns or commissions.
There were no cash dividends paid during the periods shown above.
At February 10, 1995, there were 416 record holders of Common Stock.
Page 9
During 1994, Registrant acquired 400 shares of its Common Stock
pursuant to unsolicited offers to sell made by non-affiliated share-
holders. During 1993, Registrant acquired 4,775 shares of its Common
Stock pursuant to unsolicited offers to sell made by non-affiliated
shareholders, including 4,600 shares at $8.00 per share. As of
February 10, 1995, the closing quoted bid price per share was $11.00.
Page 10
<TABLE>
Item 6. Selected Financial Data.
A summary of selected financial data follows:
<S> <C> <C> <C>
Year ended December 31
__________________________________________________________________________
1994 1993 1992 1991 1990
Revenue $ 128,042,422 $110,597,782 $106,607,410 $ 89,131,826 $ 81,063,628
Income before
extraordinary item $ 5,901,012 $ 3,714,799 $ 7,097,181 $ 4,905,179 $ 2,189,006
Net incom $ 5,901,012 $ 3,714,799 $ 6,212,775 $ 4,905,179 $ 2,658,330
Income per share
before extraordinary
item and cumulative $1.35 $.85 $1.55 $1.04 $.46
effect of changes in
accounting principles
Extraordinary items and
cumulative effect of
changes in accounting - - ($.20)(2) - $.10(1)
principles per share
Net income per share $1.35 $.85 $1.35 $1.04 $.56
Total Assets $ 71,588,003 $ 76,664,638 $ 62,561,745 $ 49,276,554 $ 47,878,344
Long-term obligations $ 12,162,043 $ 13,479,802 $ 13,115,102 $ 13,908,805 $ 11,992,487
Shareholders' equity $ 35,983,648 $ 30,154,986 $ 26,597,961 $ 22,854,004 $ 17,953,725
Cash dividends per
common share None None None None None
(1) net effect of utilization of net operating loss carryforward.
(2) represents cumulative effect of changes in accounting principles for
income taxes and post-retirement benefits.
Page 11
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
Registrant's working capital increased to $35,149,000 at
December 31, 1994 from $30,910,000 at December 31, 1993 primarily due to
net income of $5,901,000. Registrant has available lines of credit of
$41,000,000 of which $22,000,000 was unused at December 31, 1994. These
lines bear interest at various rates approximating the prime rate.
Registrant's management believe that funds provided by operations, plus
Registrant's existing lines of credit and debt capacity, are adequate to
meet its anticipated capital and operating needs. As of December 31, 1994,
Registrant did not have any material commitments for capital expenditures.
Cash flows provided by operations for the year ended December 31,
1994 were $15,415,000 representing an increase of $20,893,000 as compared to
the year ended December 31, 1993. This increase was primarily due to a
decrese in inventory in 1994 of $9,012,000 as compared to an increase in
inventory in 1993 of $13,514,000. Such decrease resulted primarily from
higher shipments in 1994 as compared to lower than anticipated shipments in
1993. Despite net income of approximately $3,715,000 for the year ended
December 31, 1993, cash used in operating activities was approximately
$6,167,000. This increase resulted from the increase in inventory of
$13,514,000 partially offset by increases in depreciation and amortization
and other liabilities of approximately $1,268,000 and $493,000,
respectively, and a decrease in accounts receivable of $2,180,000.
Cash used in investing activities for 1994 was $1,304,000
representing a decrease of $3,770,000 in 1994 as compared to 1993. This
decrease was primarily due to a reduction in purchase of plant and equipment
Page 12
of $1,954,000 and a reduction in loans to an independent sewing contractor of
$1,579,000. Purchases of plant and equipment and loans made to an independent
sewing contractor of approximately $3,134,000, and $1,740,000,
respectively, were the significant increases in cash used in investing
activities in 1993, which equaled $5,074,000. Cash used in financing
activities in 1994 was $13,529,000 representing an increase of $23,527,000
in 1994 as compared to 1993 due to a reduction in net borrowings of
$13,081,000 in 1994 whereas Registrant's net borrowings increased
$10,481,000 in 1993. Cash provided by financing activities in 1993
increased to $9,998,000 due to increased net borrowings of $10,481,000
partially offset by debt repayments of $445,000.
Results of Operations
Net sales for 1994 were approximately 16% higher than in 1993,
principally due to an increase in demand for Registrant's products. Net
sales for 1993 were approximately 4% higher than in 1992, principally due
to a increase in unit volume of goods sold of Registrant's products. Unit
volum of goods sold increased 12% from 1993 to 1994 and increased 3% from
1992 t 1993. Sales mixture (a weighted average of revenue per unit,
taking into account the sales levels of Registrant's various products and
styles of products) resulted in an increase in the average revenue per unit
sold of 2% in 1994 over 1993 and a 1% increase of the average revenue per
unit sold in 1993 over 1992.
Gross margin increased to $32,539,000 for the year ended December
31, 1994 from $28,446,000 in 1993 and $31,408,000 in 1992. The gross margin
percentage to net sales decreased slightly to 25.4% in 1994 from 25.7% in
1993.
Page 13
The gross margin percentage to net sales decreased to 25.7% in 1993 from
29.5% in 1992 because of an increase in the average cost per unit sold of
approximately 6%. Shipping and general and administrative expenses as a
percentage of net sales were generally consistent for the years ended
December 31, 1994, 1993 and 1992. Selling and advertising expenses
decreased as a percentage of net sales for the year ended December 31, 1994
as compared to the year ended December 31, 1993 because of the
non-recurrence in 1994 of expend tures related to a national advertising
campaign in 1993. Interest expense was generally consistent for 1994, 1993 and
1992.
Registrant's effective Federal tax rate was generally consistent in 1994 and
1993. Registrant's Puerto Rican division was incorporated as a wholly-
owned subsidiary in 1992. As a result, Registrant obtained certain
tax benefits under Section 936 of the Internal Revenue Code. This change
was a major factor in the decrease of Registrant's effective Federal tax
rate to approximately 27.0% in 1993, from 33.0% in 1992.
As a result of the above factors, Registrant's net income increased
58.9% in 1994 over 1993 and decreased 40.2% in 1993 over 1992.
In 1992, Registrant adopted Statement of Financial Accounting
Standard No. 109, "Accounting for Income Taxes". The effect of such
adoption was recorded as a cumulative effect of a change in accounting
principle. The effect of such adoption was a $12,800 credit to net income
in 1992. (See Notes 2 and 7 of the Notes to Consolidated Financial
Statements.)
Registrant adopted the provisions of Statement of Financial Accounting
Standard No. 106 "Accounting for Post-retirement Benefit Other Than Pensions"
and recorded a transition obligation of approximately $897,000 in 1992 net
Page 14
of deferred tax benefits as a charge to net income. Such charge is reflected
as a cumulative effect of a change in accounting principle on Registrant's
Consolidated Statement of Income for the year ended December 31, 1992.
(See Notes 2 and 8 to Notes to Consolidated Financial Statements.)
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data are listed
under Item 14 in this Annual Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable.
Page 15
PART III
Item 10. Directors and Executive Officers of Registrant.
The table below sets forth the names and ages of all
of the directors and executive officers of Registrant as of
February 10, 1995. The term of each director expires at the next
annual meeting of stockholders and upon his successor being duly
elected and qualified. Each of the officers serves at the pleasure
of the Board of Directors subject, in certain cases, to the terms of
employment agreements.
<TABLE>
<S> <C> <C> <C> <C>
Positions
Director Officer and Offices
Name Age Since Since with Registrant
______________________________________________________________________________________
Otmar Dreher 55 12/81 - Director
Rudolf Groetzinger 59 12/81 - Director
Frank Magrone 60 12/73 9/75 Director,
President and
Chief Operating
Officer
Peter Muehlbauer 47 - 2/85 Secretary,
Treasurer and
Vice President-
Finance
Angelo Sanguedolce 65 9/75 12/77 Director and
Executive Vice
President
Guenther Spiesshofer 58 12/81 3/82 Director,
Chairman of
the Board and
Chief Executive
Officer
Edward B. Zerbe 68 - 4/80 Vice President-
Marketing
</TABLE>
Page 16
From October, 1986 to April, 1990, Mr. Dreher was Vice
President, International Development, of Sterling Engineered Products,
Inc. (renamed AEROQUIP Corporation in 1988), a company located in Maumee,
Ohio and engaged in the manufacture of plastic parts for the automobile
and furniture industries. From April, 1990 to January, 1991 Mr. Dreher
was Vice President of Michigan International Business Associates, Inc.,
a consulting firm located in Ann Arbor, Michigan which specialized in
international business development. From January, 1991 to September,
1992, Mr. Dreher was President of Steiff USA. L.P., a toy importer located
in New York City, N.Y. Since September, 1992, Mr. Dreher has been President
and Chief Executive Officer of Steiff Margarete, GmbH, a toy manufacturer
located in Giengen, Germany.
Mr. Groetzinger retired in 1993. Prior to retirement he
was a marketing executive for Inter-Triumph Marketing GmbH ("Inter-
Triumph"), an affiliate of Triumph located in Munich, Germany since
1986. Inter-Triumph oversees the planning and effectuation of the
marketing activities of the Triumph International Group, located in
Munich, Germany. The Triumph International Group consists of companies
located mainly in Europe, South America and the Far East, all of which
are engaged in aspects of the manufacture and distribution of corsetry,
lingerie, swimwear and beachwear.
Mr. Magrone has been President of Registrant since
1978 and of its former subsidiaries, Crescent and Lilyette Brassiere
Co., Inc. ("Lilyette"), since 1971 and 1976, respectively. Lilyette
and Crescent were merged into Registrant effective December 31, 1980.
Since 1980, Mr. Magrone has been a director of Marietta Corporation,
Page 17
located in Cortland, New York. Marietta Corporation specializes in
the design, manufacture, packaging, marketing and distribution of
guest amenity programs, including soap products, to the travel and
lodging industry in the United States and abroad.
Mr. Sanguedolce has been Executive Vice President of
Registrant since 1981 and a Vice President of Registrant since 1977
and of its former subsidiaries, Crescent and Lilyette, since 1971
and 1976, respectively.
Mr. Spiesshofer has been Chairman of the Board and Chief
Executive Officer of Registrant since March, 1982. He is a partner in
Triumph International Spiesshofer & Braun which is located in Zurzach,
Switzerland. He is also the President of Triumph, and a member of
the Board of Directors of various other companies in the Triumph
International Group. Triumph International Spiesshofer & Braun is
the parent company of all the companies which constitute the Triumph
International Group.
Mr. Zerbe has been Vice President-Marketing of Registrant
since April, 1980.
Mr. Muehlbauer has been Treasurer and Vice President -
Finance of Registrant since February, 1985. Prior thereto, he was
employed as a Controller by Triumph Holding GmbH, a wholly-owned
subsidiary of Triumph International Spiesshofer & Braun, for 12 years.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to Registrant by each person who, at any time during the fiscal year
ended December 31, 1994, was a director, executive officer or beneficial
owner of more than 10% of Registrant's Common Stock with respect to the
fiscal year ended December 31, 1994, and Forms 5 and amendments thereto
furnished to Registrant by such persons with respect to such fiscal year,
and written
Page 18
representations from certain of such persons that no Forms 5 were required
for those persons, Registrant believes that during and with respect to the
fiscal year ended December 31, 1994, all filing requirements under Section
16(a) of the Securities Exchange Act of 1934, as amended, applicable to its
directors, executive officers and the beneficial owners of more than 10% of
Registrant's Common Stock were complied with.
Item 11. Executive Compensation
The following table sets forth the compensation paid by Registrant for
the fiscal years ended December 31, 1994, 1993 and 1992 to its chief
Executive Officer and each of its four remaining most highly compensated
executive officer of Registrant:
<TABLE>
SUMMARY COMPENSATION TABLE
___________________________
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM COMPENSATION(1)
ANNUAL COMPENSATION AWARDS PAYOUTS
______OTHER_____________ __________________________
ANNUAL ALL OTHER
NAME AND PRINCIPAL COMPEN STOCK OPTIONS/ LTIP COMPENS-
POSITION YEAR SALARY BONUS SATION AWARD(S) SARS PAYOUTS TION(3)
______________________________________________________________________________________________________________
Guenther Spiesshofer, 1994 - - - N/A N/A N/A -
Chairman of the 1993 - - - N/A N/A N/A -
Board and Chief 1992 - - - N/A N/A N/A -
Executive Officer(2)
Frank Magrone, 1994 $323,086 $200,000 $550,000(4) N/A N/A N/A $ 12,864
President 1993 $309,068 $138,000 - N/A N/A N/A $ 19,415
1992 $254,350 $247,500, - N/A N/A N/A $ 4,809
Angelo Sanguedolce, 1994 $159,463 $ 89,000 - N/A N/A N/A $ 19,009
Executive Vice 1993 $144,638 $ 61,000 - N/A N/A N/A $ 19,883
President 1992 $137,750 $110,000 - N/A N/A N/A $ 3,010
Edward B. Zerbe, 1994 $140,600 $ 13,500 - N/A N/A N/A $ 9,159
Vice President 1993 $135,000 $ 9,500 - N/A N/A N/A $ 8,624
1992 $125,000 $ 16,500 - N/A N/A N/A $ 950
Peter Muehlbauer, 1994 $115,000 $ 38,000 - N/A N/A N/A $ 3,275
Vice President 1993 $110,000 $ 26,000 - N/A N/A N/A $ 5,168
1992 $100,000 $ 48,000 - N/A N/A N/A $ 870
(1) Registrant has not provided restricted stock awards, stock options, stock
appreciation rights or long-term incentive payouts to any executive officers.
(2) Registrant made payments for purchases of goods and services and guaantee
fees to Triumph, a subsidiary of Triumph International Spiesshofer & Braun,
of which Mr. Spiesshofer is a partner. See "Item 13. Certain Relationships
and Related Transactions."
Page 19
</TABLE>
Directors who are officers of Registrant receive no
special compensation for their services as directors. Each of the
directors who is not an officer is entitled to receive $600 for each
meeting that he attends.
On December 13, 1991, Registrant notified participants of
a defined benefit pension plan (the "Plan"), in which substantially
all of its employees in the Crescent division participate, that
benefits provided by the Plan were curtailed as of December 31, 1991.
The Plan provides that upon retirement at age 65, each participant
will receive a monthly pension, for his life, or an actuarial
equivalent thereof, equal to two ($2.00) dollars per year of ser-
vice prior to December 1, 1971 and five ($5.00) dollars per year
of service after November 30, 1971. The maximum monthly pension
payable at normal retirement date under the plan is one hundred ($100.00)
dollars per month, with adjustment for actuarially equivalent amounts
for both early and late retirement. Compensation is not considered
by the Plan for the purpose of computing benefits. Since the Plan
defines benefits rather than contributions, costs are not determined
on an individual basis. The amount of the contribution for all participating
employees for the year ending December 31, 1994 was approximately $27,000.
Messrs. Magrone, Sanguedolce and Muehlbauer are the only officers
of Registrant who participate in the Plan. Messrs. Magrone and Sanguedolce's
years of service, for Plan purposes, include their service time with
(3) In 1994, includes (a) life insurance premiums (Mr. Sanguedolce $4,125,
Mr. Zerbe $4,259, and Mr. Muehlbauer $609), (b) match of individual
deferred compensation amounts (Mr. Magrone $5,375, Mr. Sanguedolce
$3,867, Mr. Zerbe $1,900), and (c) match of lost benefits caused by IRS
limitations on participation in Registrant's defined contribution plan
(Mr. Magrone $7,489, Mr. Sanguedolce $11,017, Mr. Zerbe $3,000,
Mr. Muehlbauer $2,666).
(4) In 1994, included $550,000 paid to Mr. Magrone upon expiration of the
then current term of his employment agreement.
Page 20
Registrant's former subsidiary, Crescent. As of December 31, 1994, Messrs.
Magrone and Sanguedolce both had 22 years of service credit, and Mr.
Muehlbauer had 9 years of service credit. Messrs. Magrone and Sanguedolce
can each expect to receive an annual benefit of twelve hundred ($1,200.00)
dollars from the Plan upon their retirement at age 65 from Registrant or an
actuarial equivalent thereof. Mr. Muehlbauer can expect to receive an
annual benefit of four hundred and twenty ($420.00) dollars from the Plan
upon his retirement at age 65 from Registrant or an actuarial equivalent
thereof.
Compensation Committee Interlocks and Insider Participation
Registrant's Board of Directors does not have a Compensation
Committee. The Executive Committee, composed of Messrs. Guenther
Spiesshofer and Frank Magrone, establishes the compensation policies of
Registrant and determines the compensation of its officers and employees.
Mr. Spiesshofer serves as the Chairman of the Board and Chief Executive
Officer of Registrant and Mr. Magrone serves as its President. Registrant
made payments for purchases of goods and services to Triumph, a subsidiary of
Triumph International Spiesshofer & Braun, of which Mr. Spiesshofer is a
partner. See Item 13. "Certain Relationships and Related Transactions" for
disclosure of certain transactions between Registrant
and Triumph. No executive officer of Registrant served during fiscal
year 1994 (i) as a member of the compensation committee or other board
committee performing equivalent functions, or in the absence of any such
committee, the entire board of directors of another entity, one of whose
executive officers served on the Executive Committee of Registrant;
(ii) as a director of another entity, one of whose executive officers
Page 21
served on the Executive Committee of Registrant; served on the Executive
Committee of Registrant; and (iii) as a member of the compensation
committee or other board committee performing equivalent functions or, in
the absence of any such committee, the entire board of directors of another
entity, one of whose executive officers served as a director of Registrant.
Employment Agreements
Mr. Sanguedolce is employed under an employment contract with
Registrant which terminates on December 31, 1996. The contract provides
for an annual salary of $159,463 per annum with an increase of 5% per annum
through the term of the contract. The contract also provides for life
insurance on Mr. Sanguedolce's life of $325,000. Upon his death, Mr.
Sanguedolce's estate is entitled to receive an amount equal to six months of
his salary at the time of his death. The contract contains additional
provisions relating to termination in the case of disability, illness,
vacations, reimbursement for expenses and the right to participate in benefits
generally available to executive employees of Registrant. Under the contract,
Mr. Sanguedolce's employment may be terminated by Registrant apart from dis-
ability, only after the exhaustion of all appeals from a final judicial
adjudication of commission of a felony, dishonesty, willful malfeasance, gross
negligence in the course of employment, or if Mr. Sanguedolce directly or
indirectly competes with Registrant, or materially breaches the terms of the
contract.
Mr. Muehlbauer, Vice President-Finance and Treasurer of Registrant,
is employed under an employment contract with Registrant which terminates
December 31, 1996. The contract provides for a salary of $121,650 in 1995
with an increase of 5% per annum.
Page 22
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
(a) The following table sets forth certain
information with respect to persons known to Registrant to
own beneficially more than 5% of Registrant's voting securities,
as of February 10, 1995.
[S] [C] [C] [C]
Percent of
Amount and Out-
Nature of standing
Title of Name and Address of Beneficial Shares
Class___ Beneficial Owner_____ Ownership (1) Owned (2)
Common Stock, Triumph International 3,670,779 83.9%
$1 par value Overseas Limited
9490 Vaduz
Aeulestrasse 74
Liechtenstein
Guenther Spiesshofer 3,692,279(3) 84.4%
Robert Koch St 32
8022 Gruenwald
Germany
Frank Magrone 350,200 8.0%
Cosmos Heights
Cortland, New York
_________________
(1) All persons listed have sole voting and investment power
with respect to their shares unless otherwise indicated.
(2) Computed on the basis of 4,375,492 shares of Common Stock
outstanding.
(3) Includes 3,670,779 shares of Common Stock owned by Triumph,
which is a subsidiary of Triumph International Spiesshofer &
Braun, of which Mr. Spiesshofer is a partner.
Page 23
(b) The following table sets forth certain
information with respect to each class of Registrant's equity
securities beneficially owned by each director and each executive
officer named in the Summary Compensation Table of Registrant and
the directors and executive officers of Registrant as a group, as of
February 10, 1995
[S] [C] [C] [C]
Percent of
Amount and Out-
Nature of standing
Title of Name and Address of Beneficial Shares
Class___ Beneficial Owner_____ Ownership (1) Owned (2)
Common Stock, Frank Magrone 350,200 8.0%
$1 par value
Guenther Spiesshofer 3,692,279(3) 84.4%
Edward Zerbe 1,300 (4)
Angelo Sanguedolce - -
Peter Muehlbauer - -
Rudolf Groetzinger - -
Otmar Dreher - -
All executive officers
and directors as a
group (7 in number) 4,043,779 92.4%
_________________
(1) All persons listed have sole voting and investment power
with respect to their shares unless otherwise indicated.
(2) Computed on the basis of 4,375,492 shares of Common Stock
outstanding.
(3) Includes 3,670,779 shares of Common Stock owned by Triumph,
which is a subsidiary of Triumph International Spiesshofer &
Braun, of which Mr. Spiesshofer is a partner.
(4) Less than 1.0%.
(c) Changes in Control
Registrant has been advised by Triumph, Guenther Spiesshofer
and Frank Magrone that they have entered into a non-binding letter of
intent with Maidenform pursuant to which Maidenform would acquire all of
the shares of Registrant's Common Stock owned by Triumph, Mr. Spiesshofer
Page 24
and Mr. Magrone in exchange for approximately $9.8 million in
cash and approximately 28.2% of the common stock of Maidenform.
Item 13. Certain Relationships and Related Transactions.
Triumph, a principal stockholder of Registrant,
guaranteed the repayment of one of Registrant's existing lines
of credit for which it received an annual fee ($80,000 during
1993) from Registrant of two percent (2%) of the guaranteed line
of credit. Such guarantee requirement was terminated as of July,
1993.
Triumph provides Registrant with technical assistance
and fills such purchase orders as Registrant may from time to time
submit. During 1994, purchases from Triumph by Registrant
amounted to $17,900,000 as compared to $25,500,000 in 1993 and
$24,800,000 in 1992 (such amounts include both payments for
finished goods and payments for assembly of materials cut by
Registrant in the United States and shipped to Triumph's facial-
ities for assembly and return).
On July 1, 1986, Frank Magrone, President and Chief
Operating Officer of Registrant, purchased from Registrant 250,000
shares of Registrant's Common Stock at a purchase price of $1.00
per share. The source of the purchase price paid by Mr. Magrone to
Registrant was a loan made by Registrant to Mr. Magrone in the principal
amount of $250,000. Mr. Magrone repaid the loan on October 31, 1994 upon
the receipt of a payment of $550,000 upon the expiration of his employment
agreement.
Page 25
Concurrently with the purchase of the 250,000 shares,
Mr. Magrone entered into a Shareholders' Agreement, dated as of
July 1, 1986, with Triumph International (Hong Kong LTD.) (TIHK),
an affiliate of Triumph, and Registrant. The Shareholders'
Agreement covers matters such as the manner in which Mr. Magrone
may sell, encumber, grant a security interest in, or in any manner
dispose of any or all of the 250,000 shares; conditions under which
TIHK may elect or is obligated to purchase such shares from Mr.
Magrone; the means by which a fair purchase price of such shares
is to be determined should TIHK elect or be obligated to purchase
such shares; conditions under which Registrant is required to buy
back such shares; certain rights of Mr. Magrone to sell such shares
if Registrant proposes to file a registration statement under the
Securities Act of 1933; remedies for breach of the Shareholders'
Agreement; and the means by which disputes arising under the
Shareholders' Agreement are to be resolved.
Page 26
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K:
(a) The following documents are filed as part of this report:
[S] [C]
Page No.
1. Financial Statements:
Independent auditor's report F-1
NCC Industries, Inc. and Subsidiary
financial statements:
Consolidated balance sheets as of
December 31, 1994 and 1993 F-2
Consolidated statements of income for
each of the three years in the
period ended December 31, 1994 F-3
Consolidated statements of shareholders'
equity for each of the three years in the
period ended December 31, 1994. F-4
Consolidated statements of cash flows
for each of the three years in the
period ended December 31, 1994. F-5
Notes to consolidated financial statements F-7
2. Financial statements schedules:
Schedule II for each of the three
years in the period ended
December 31, 1994. F-17
Schedules other than those listed above
have been omitted because they are not
applicable or the required information
is shown in the financial statements or
notes thereto.
3. Exhibits:
The Exhibits Index is on Page 48.
(b) Reports on Form 8-K - None.
(c) Exhibit Index is on Page 48.
(d) See (a)2 above.
Page 27
INDEPENDENT AUDITORS' REPORT
The Board of Directors
NCC Industries, Inc.
Cortland, New York
We have audited the accompanying consolidated balance sheets of NCC
Industries, Inc. and Subsidiary as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1994.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidate financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
NCC Industries, Inc. and Subsidiary as of December 31, 1994 and 1993 and
the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
As discussed in Note 2 to the financial statements, in 1992 the Company
changed its method of accounting for deferred income taxes and
postretirement benefits other than pensions.
COOPERS & LYBRAND L.L.P.
Syracuse, New York
February 3, 1995
F-1
Page 28
NCC INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
___________
<TABLE>
ASSETS
<S> <C> <C>
December 31,
1994 1993
Current assets:
Cash and cash equivalents $ 1,034,820 $ 452,085
Short-term investments 689,204
Accounts receivable, less allowance
for doubtful accounts of $350,000
in 1994 and 1993 16,448,704 12,353,671
Inventories 39,104,654 48,116,383
Prepaid expenses 396,012 330,080
Income taxes refundable 99,042 232,292
Deferred taxes 1,507,863 1,766,047
__________ __________
Total current assets 58,591,095 63,939,762
Property, plant and equipment, net 11,186,318 11,557,459
Other assets 1,810,590 1,167,417
__________ _________
Total assets $71,588,003 $76,664,638
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
F-2
Page 29
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
December 31,
1994 1993
Current liabilities:
Notes payable, banks $12,000,000 $24,081,000
Accounts payable 5,352,165 3,307,988
Accrued expenses 3,112,645 3,208,006
Due to affiliates 2,532,502 1,987,856
Current portion of long-term debt 445,000 445,000
Total current liabilities 23,442,312 33,029,850
Long-term debt, less current portion 2,361,415 2,806,415
Long-term notes payable, bank 7,000,000 8,000,000
Deferred taxes 628,053 746,121
Other liabilities 2,172,575 1,927,266
Shareholders' equity:
$7 cumulative preferred stock, $1 par value;
authorized 500,000 shares;
issued and outstanding - none
Common stock, $1 par value,
authorized 10,000,000 shares,
issued 4,866,841 shares 4,866,841 4,866,841
Additional paid-in capital 5,077,911 5,077,911
Retained earnings 28,894,732 22,993,720
Minimum pension liability ( 172,808) ( 103,558)
Less:
Common stock in treasury, 491,349 shares
in 1994 and 490,949 shares in 1993, at cost ( 2,683,028) ( 2,679,928)
Total shareholders' equity 35,983,648 30,154,986
Total liabilities and shareholders' equity $71,588,003 $76,664,638
Page 30
NCC INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
___________
<S> <C> <C> <C>
Years Ended December 31,
1994 1993 1992
Net sales $128,042,422 $110,597,782 $106,607,410
Cost and expenses:
Cost of sales 95,503,504 82,151,733 75,198,990
Shipping, selling,
general and administrative 22,674,374 21,709,190 19,195,442
Interest, net 1,634,346 1,670,443 1,634,478
119,812,224 105,531,366 96,028,910
Income before income taxes
and cumulative effect of
changes in accounting principles 8,230,198 5,066,416 10,578,500
Income taxes:
Current:
Federal 1,923,221 1,386,234 3,071,043
State and local 265,849 247,174 353,859
Deferred 140,116 ( 281,791) 56,417
2,329,186 1,351,617 3,481,319
Income before cumulative effect
of changes in accounting principles 5,901,012 3,714,799 7,097,181
Cumulative effect of changes in
accounting principles (net of
deferred tax effect of $288,394) 884,406
Net income $ 5,901,012 $ 3,714,799 $ 6,212,775
Income per common share:
Before cumulative effect of
changes in accounting principles $1.35 $.85 $1.55
Cumulative effect of changes
in accounting principles ( .20)
Net income $1.35 $.85 $1.35
Weighted average number of shares 4,375,563 4,379,721 4,586,880
The accompanying notes are an integral part
of the consolidated financial statements.
F-3
Page 31
NCC INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
__________
<S> <C> <C> <C> <C> <C> <C>
Common Stock Additional Minimum Treasury Stock
Number of Paid-In Retained Pension Number of
Shares Issued Amount Capital Earnings Liability Shares Amount
Balance, December 31, 1991 4,866,841 $4,866,841 $5,077,911 $13,066,146 139,314 ($ 156,894)
Net income 6,212,775
Purchase of treasury stock 346,860 ( 2,485,009)
Balance, December 31, 1992 4,866,841 $4,866,841 5,077,911 19,278,921 486,174 ( 2,641,903)
Net income 3,714,799
Purchase of treasury stock 4,775 ( 38,025)
Minimum pension liability ($103,558)
Balance, December 31, 1993 4,866,841 4,866,841 5,077,911 22,993,720 ( 103,558) 490,949 ( 2,679,928)
Net income 5,901,012
Purchase of treasury stock 400 ( 3,100)
Minimum pension liability ( 69,250)
Balance, December 31, 1994 4,866,841 $4,866,841 $5,077,911 $28,894,732 ($172,808) 491,349 ($2,683,028)
The accompanying notes are an integral part of the consolidated financial statements.
F-4
Page 32
NCC INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
___________
Increase (Decrease) in Cash
<S> <C> <C> <C>
Years Ended December 31,
1994 1993 1992
Cash flows from operating activities:
Net income $ 5,901,012 $ 3,714,799 $6,212,775
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Depreciation 1,466,132 1,242,357 972,799
Amortization 22,765 25,897 106,895
Deferred income taxes 140,116 ( 281,791) ( 244,776)
Provision for losses
on accounts receivable ( 16,447) 72,400 542,143
Loss on retirement
of plant and equipment 58,550 35,465 121,933
Changes in operating
assets and liabilities:
Accounts receivable ( 4,078,586) 2,180,435 ( 4,379,773)
Inventories 9,011,729 ( 13,514,288) ( 6,825,106)
Accounts payable
and accrued expenses 1,879,566 ( 171,768) 2,138,714
Due to affiliate 544,646 ( 235,313) 557,383
Income taxes refundable/payable 133,250 ( 51,037) ( 1,473,023)
Other liabilities 245,309 492,623 947,509
Other assets 173,267 202,321 150,210
Prepaid expenses ( 65,932) 121,029 152,099
Net cash (used in) provided
by operating activities 15,415,377 ( 6,166,871) ( 1,020,218)
Cash flows from investing activities:
Purchase of plant and equipment ( 1,170,042) ( 3,133,830) ( 2,403,115)
Proceeds from sales of fixed assets 16,500
Funds received from bond trustee 102,472
Decrease (increase) in
short-term investments ( 200,548) 206,248
Funds issued for supplier
note receivable ( 150,000) ( 1,739,589)
Net cash used in
investing activities ( 1,303,542) ( 5,073,967) ( 2,094,395)
(Continued)
F-5
Page 33
NCC INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
___________
Increase (Decrease) in Cash
<S> <C> <C> <C>
Years Ended December 31,
1994 1993 1992
Cash flows from financing activities:
Proceeds from
issuance of long-term debt $ 500,000
Payments to acquire treasury stock ($ 3,100) ($ 38,025) ( 2,485,009)
Repayment of debt
to majority shareholder ( 256,435)
Repayment of long-term debt ( 445,000) ( 445,000) ( 2,536,008)
Net borrowings (repayment)
under notes payable, banks ( 13,081,000) 10,481,000 9,249,927
Net cash provided by (used in)
financing activities ( 13,529,100) 9,997,975 4,472,475
Net increase (decrease) in cash 582,735 ( 1,242,863) 1,357,862
Cash and cash equivalents,
beginning of year 452,085 1,694,948 337,086
Cash and cash equivalents,
end of year $ 1,034,820 $ 452,085 $1,694,948
Supplemental disclosures of cash flow information (see Note 1):
Cash paid during the year for:
Interest $1,631,230 $1,645,747 $1,650,466
Income taxes 2,271,231 1,572,823 4,861,255
The accompanying notes are an integral part
of the consolidated financial statements.
F-6
Page 34
</TABLE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is engaged in the garment business, in which it manufactures and
distributes (predominantly to retail businesses) popular priced ladies
under garments. Triumph International Overseas Ltd., a Liechtenstein
corporation ("Triumph"),is the Company's majority shareholder who at
December 31, 1994 and 1993 owned approximately 84% of the Company's
outstanding common shares.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary. The subsidiary, Crescent Industries,
Inc., commenced operations on April 27, 1992. All significant inter-
company accounts and transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Inventories
Inventories are stated at the lower-of-cost or market. Cost is deter-
mined on the first-in, first-out basis.
Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost. Depreciation has been com-
puted by the straight-line method over the estimated useful lives of the
related assets.
Revenue Recognition
The Company's policy of recognizing revenue is to record sales upon shipment
of goods.
Income Per Common Share
Per share amounts are computed based on the weighted average number of
shares of common stock outstanding.
F-7
Page 35
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
Income tax expense consists of taxes currently payable and deferred income
taxes which are based upon temporary differences between financial
accounting and tax bases of assets and liabilities in accordance with
SFAS No. 109 as measured by the enacted tax rates which are anticipated
to be in effect when these differences reverse. The deferred tax
provision is the result of the net change in the deferred tax assets and
liabilities. A valuation allowance is established when it is necessary
to reduce deferred tax assets to amounts expected to be realized.
Other Assets
Other assets consist principally of long-term investments and notes
receivabl due from a garment processor. The notes bear interest at the
prime rate. Payments are made based on the billings by the processor to
the Company. The notes are being repaid by deduction from amounts owed
by the Company to the processor for services performed. During 1994 and
1993, the Company deducted $528,920 and $130,530, respectively, and
applied such deductions to the notes. It is estimated that the notes
will be reduced by $400,000 in 1995.
In May 1993, Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Securities, was issued by
the Financial Accounting Standards Board. As permitted, the Company
implemented this Standard on January 1, 1994, retroactive application is
not permitted. The effect of the adoption was immaterial to the Company.
Investments consist primarily of mutual funds and bonds and are stated at
cost. The carrying value of investments approximates market. In 1993
these investments were included in the caption short-term investments in
the balance sheet.
Reclassification
Certain amounts in prior years have been reclassified to conform to the
current year's presentation.
F-8
Page 36
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
2. CHANGES IN ACCOUNTING PRINCIPLES
The Company adopted the provisions of SFAS 106 effective January 1, 1992.
The immediate recognition approach was elected which resulted in the
recording of a transition obligation of $1,185,600 or $.20 per weighted
average common share. Such amount has been reflected in the consolidated
statement of income, net of tax effect, as a cumulative effect of change
in accounting for the year ended December 31, 1992.
In addition, the Company adopted the provisions of SFAS 109 effective Janu-
ary 1, 1992. At January 1, 1992, the Company recorded a tax benefit of
approximately $12,800, which represents the net increase to the deferred tax
asset as of that date. Such amount has also been reflected in the con-
solidated statement of income as a cumulative effect of change in
accounting for the year ended December 31, 1992.
3. INVENTORIES
Inventories by major classifications are as follows:
[S] [C] [C]
1994 1993
Raw materials $ 7,287,229 $ 7,110,600
Work-in-process 9,639,312 10,916,850
Finished goods 22,178,113 30,088,933
$39,104,654 $48,116,383
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, consisted of the following:
[S] [C] [C]
1994 1993
Land $ 239,867 $ 239,867
Building and building improvements 6,334,777 6,400,792
Machinery and equipment 9,798,420 9,019,508
Construction in progress 190,206 195,012
16,563,270 15,855,179
Less: Accumulated depreciation 5,376,952 4,297,720
$11,186,318 $11,557,459
F-9
Page 37
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
5. NOTES PAYABLE, BANKS
The Company has entered into note agreements with various financial
institutions. In general, each agreement stipulates the maximum borrowings
from an institution that can be outstanding at any time. The Company borrows
against these lines with terms ranging from 90 days to over one year at
rates ranging from 5.4375% to 7.1875% Long-term notes payable of
$7,000,000 bear interest at rates which are periodically negotiated
(rates range from 6.82% to 7.49% as of December 31, 1994). These long-
term notes mature in August 1997. The Company has $22,000,000 available
in unused bank lines of credit at December 31, 1994. The availability of
these lines is subject to maintaining satisfactory credit standards and
certain financial ratios.
6. LONG-TERM DEBT
Long-term debt at December 31, 1994, consisted of $2,806,415 Series "A"
Industrial Development Bonds (the Bonds) issued by Cortland County
Industrial Development Agency. The Bonds are tax-exempt and bear interest
at various rates based on maturity, ranging from 6.6% to 8%, and are
payable on September 15 and March 15 of each year. Annual maturities are
$445,000 through 1998, $210,000 in 1999, and $205,000 thereafter, through
September 15, 2003.
The Bonds are collateralized by a first mortgage on the land, facility and
certain equipment purchased with the proceeds of the bond financing. The
Bonds are also collateralized by an irrevocable letter of credit for
$3,019,238 which was issued for the account of the Company in favor of
the Bond Trustee for the benefit of the bondholders.
The Bond Indenture requires, among other things, that the Company maintain
certain financial ratios.
7. INCOME TAXES
As discussed in Note 2, the Company adopted SFAS No. 109 as of January 1,
1992.
The temporary differences which give rise to a significant portion of
deferred tax assets and liability at December 31, 1994 are as follows:
<TABLE>
<S> <C> <C> <C>
Assets Liability Net
Inventory $1,003,712 $1,003,712
Accounts receivable 127,085 127,085
Depreciation 559,929 ($1,317,283) ( 757,354)
Accruals 563,957 563,957
Employee benefit plans 560,149 560,149
Others 41,822 41,822
2,856,654 ( 1,317,283) 1,539,371
Less: Valuation allowance ( 659,561) ( 659,561)
$2,197,093 ($1,317,283) $ 879,810
</TABLE>
F-10
Page 38
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
7. INCOME TAXES (Continued)
The net deferred tax asset of $879,810 consists of a net current deferred
tax asset of $1,507,863 and a net long-term deferred tax liability of
$628,053.
The temporary differences which give rise to a significant portion of
deferred tax assets and liability at December 31, 1993 are as follows:
<TABLE>
<S> <C> <C> <C>
Assets Liability Net
Inventory $1,040,934 $1,040,934
Accounts receivable 127,085 127,085
Depreciation 442,238 ($1,160,334) ( 718,096)
Accruals 560,164 560,164
Employee benefit plans 551,487 551,487
Others 89,717 89,717
2,811,625 ( 1,160,334) 1,651,291
Less: Valuation allowance ( 631,365) ( 631,365)
$2,180,260 ($1,160,334) $1,019,926
The net deferred tax asset of $1,019,926 consists of a net current deferred
tax asset of $1,766,047 and a net long-term deferred tax liability of $746,121.
The temporary differences which give rise to a significant portion of deferred
tax assets and liabilities at December 31, 1992 are as follows:
<S> <C> <C> <C>
Assets Liability Net
Inventory $ 706,507 $ 706,507
Accounts receivable 124,805 124,805
Depreciation 232,665 ($ 868,340) ( 635,675)
Accruals 419,402 419,402
Employee benefit plans 525,587 525,587
Others 35,329 35,329
2,044,295 ( 868,340) 1,175,955
Less: Valuation allowance ( 437,820) ( 437,820)
$1,606,475 ($ 868,340) $ 738,135
</TABLE>
The net deferred tax asset of $738,135 consists of a net current
deferred tax asset of $1,167,179 and a net long-term deferred tax
liability of $429,044.
The valuation reserve changed by $72,087 which resulted in additional tax
expense during 1992.
F-11
Page 39
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
7. INCOME TAXES (Continued)
Reconciliation of federal statutory rate to the effective income tax rate
for years ended December 31 follows:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
Statutory federal taxes 34.0% 34.0% 34.0%
State income taxes, net of
federal income tax benefit 1.8 2.5 2.1
Adjustment of the valuation allowance .4 3.7 1.5
Section 936 incentive credit ( 7.9) (13.5) ( 4.7)
28.3% 26.7% 32.9%
</TABLE>
At December 31, 1994, the Company has investment tax credit carryforwards
for New York State tax purposes of approximately $180,000. These credits
expire at various times through December, 2004.
8. RETIREMENT BENEFIT PLANS
Pension Plans
a. The Company has a noncontributory defined benefit pension plan.
Employees may no longer accrue service benefits due to an amendment
in 1991, but may continue to receive service benefits for vesting
purposes. The Company funds an amount each year that is necessary
to keep the plan on a sound actuarial basis.
The discount rate used to determine the actuarial present value of the
projected benefit obligation was 7.5%, 6.25% and 7.50% at December 31,
1994, 1993 and 1992, respectively. The expected long-term rate of
return on assets used to determine the net pension cost was 8%, 7.5%
and 8% during 1994, 1993 and 1992, respectively.
<TABLE>
<S> <C> <C>
1994 1993
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
vested benefits of $1,571,377 and
$1,682,911 ($1,585,552) ($1,728,001)
Projected benefit obligation
for service provided to date ($1,585,552) ($1,728,001)
Plan assets at fair value, primarily
cash equivalents and U. S. government
securities 1,193,331 1,374,816
Projected benefit obligation
in excess of plan assets ( 392,221) ( 353,185)
Unrecognized net loss 172,808 103,558
Accrued pension cost ( 219,413) ( 249,627)
Minimum pension liability ( 172,808) ( 103,558)
Unfunded pension liability
included in accrued expenses ($ 392,221) ($ 353,185)
</TABLE> F-12
Page 40
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
8. RETIREMENT BENEFIT PLANS (Continued)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
Net pension cost includes:
Service cost $ 43,630
Interest cost $108,896 $107,265 109,218
Actual return on plan assets 106,687 ( 88,403) ( 122,315)
Net amortization and deferral ( 210,793) 9,765 19,650
$ 4,790 $ 28,627 $ 50,183
</TABLE>
b. On January 1, 1992, the Company implemented a defined contribution plan
covering all participants in the defined benefit plan or active
Continental U.S. employees age 21 or older with one year of service
except for certain executives. Contributions to the plan are deter-
mined at the discretion of the Board of Directors and are based on
participants' age and compensation. Salary deferrals may be made by
the participants commencing January 1, 1993. Total defined contribu-
tions costs for 1994, 1993 and 1992 were $247,794, $223,772 and
$281,575, respectively.
Postretirement Health Care and Life Insurance Plan
The Company provides for certain limited postretirement medical and life
insurance benefits covering certain employees hired prior to December
1, 1977. As discussed in Note 2, the Company adopted in 1992 the
provisions of SFA No. 106, Employers Accounting for Postretirement
Benefits Other Than Pensions.
The Accumulated Postretirement Benefit Obligation was determined
using a discount rate of 6.5% and 6.5% at December 31, 1994 and 1993,
respectively. The assumed healthcare cost trend rate used was 10% for
1994; the rate was assumed to decrease gradually to 5% by the year
2008 and remain at that level thereafter. The following sets forth
the Plan's status with amounts reported in the Company's consolidated
balance sheet at December 31.
<TABLE>
<S> <C> <C>
1994 1993
Accumulated Postretirement
Benefit Obligation (APBO):
Retirees $ 708,000 $ 786,300
Active plan participants
fully eligible 320,600 295,400
Other active plan participants 264,500 435,700
Total APBO 1,293,100 1,517,400
Plan assets at fair value -0- -0-
APBO in excess of plan assets 1,293,100 1,517,400
Unrecognized net gain (loss) 30,200 ( 248,200)
Accrued postretirement benefit
obligation included in other liabilities $1,323,300 $1,269,200
</TABLE>
F-13
Page 41
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
8. RETIREMENT BENEFIT PLANS (Continued)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
Net Periodic Post-
retirement Benefit Expense:
Service cost $ 12,200 $ 14,400 $ 12,800
Interest cost 84,400 99,200 92,800
Net periodic postretire-
ment benefit expense $ 96,600 $113,600 $105,600
</TABLE>
A discount rate of 7.5%, 8% and 8% was used to determine the net periodic
postretirement benefit expense for December 31, 1994, 1993 and 1992.
Increasing the assumed healthcare cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1994 by $131,800 and increase the aggregate
of the service cost and interest cost of net periodic postretirement
benefit expense by $5,900.
9. COMMITMENTS
Leases
Rent expense was approximately $262,000, $428,000 and $424,000 for the years
ended December 31, 1994, 1993 and 1992, respectively. Minimum lease
commitments, exclusive of real estate taxes and other expenses, under all
noncancelable real property operating leases at December 31, 1994 are as
follows:
1995 $ 476,868
1996 481,526
1997 490,712
1998 520,286
1999 490,411
Thereafter 1,609,833
The leases provide for the payment of increases in real estate taxes and
other costs.
F-14
page 42
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
10. RELATED PARTY TRANSACTIONS
During 1994, 1993 and 1992, the Company purchased merchandise and con-
tracted labor from Triumph and its affiliates amounting to $17,900,000,
$25,500,000 and $24,800,000, respectively, and made interest payments to
Triumph of $13,000 in 1992.
Until July 1993, Triumph guaranteed certain notes payable and lines of
credit, for which the Company incurred loan guarantee fees amounting to
approximately $80,000 and $160,000 in 1993 and 1992, respectively.
In January 1992, the Company purchased 100,000 shares of its common stock
from an officer of the Company for $6.50 per share.
In July 1986, the Company's President acquired 250,000 shares of the
Company's common stock for $1 per share, which approximated market value,
in exchange for a $250,000 promissory note. The shares are subject to a
shareholder's agreement among the President, the Company and Triumph
International (Hong Kong) Ltd ("TIHK"), which, among other things,
restricts the President from disposing of the shares to other than TIHK
and requires TIHK, under certain conditions, to purchase such shares from
the President upon termination of his employment. The promissory note
called for semi-annual interest payments at an annual interest rate of
7.5%, with principal due on October 31, 1994.
The President's employment agreement also included a bonus of $550,000 which
was paid upon expiration of the agreement on October 31, 1994. At such time
the aforementioned note was paid in full.
11. MAJOR CUSTOMERS
The Company had sales to one customer which approximated 19% in 1994, 20% in
1993 and, 19% in 1992, sales to another customer approximated 17% in
1994, 16% in 1993 and 12% in 1992 and sales to a third customer
approximated 10% in 1994, 9% in 1993 and 15% in 1992.
12. CONTINGENCIES
The Company is subject to actions that arise in the ordinary course of its
business activities. Management believes that any resolution of such
matters will not materially affect the financial position or results of
operations of the Company. Management believes, that they have
meritorious defenses and intends to vigorously defend such actions.
F-15
Page 43
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________
13. SUBSEQUENT EVENT
Subsequent to year end, the Company announced that Triumph and the Company's
president have entered into negotiations to sell their holdings
(approximately 92%) of the Company's common stock to Maidenform Worldwide
Inc.
F-16
Page 44
INDEPENDENT AUDITORS' REPORT
The Board of Directors
NCC Industries, Inc.
Cortland, New York
Our report on the consolidated financial statements of NCC
Industries, Inc. and Subsidiary is included on page F-1 of this
Form 10-K. In connection with our audits of such financial state-
ments, we have also audited the related financial statement schedule
on page F-18 of this Form 10-K.
In our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken
as a whole, present fairly, in all material respects, the inform-
ation required to be included therein.
COOPERS & LYBRAND L.L.P.
Syracuse, New York
February 3, 1995
F-17
Page 45
<TABLE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
______________
<S> <C> <C> <C> <C>
Col. A Col. B Col. C Col. D Col. E
Additions
Balance at Charged to Balance at
Beginning Costs and End
Description of Period Expenses Deductions of Period
1994
Allowance for doubtful
accounts receivable $350,000 ($ 16,447) ($ 16,447) (b) $350,000
1993
Allowance for doubtful
accounts receivable $312,700 $ 72,400 $ 35,100 (b) $350,000
1992
Allowance for doubtful
accounts receivable $470,600 $542,100 $700,000 (a) $312,700
</TABLE>
(a) Uncollectible accounts written off.
(b) Uncollectible accounts written off net of bad debt recoveries.
F-18
Page 46
<TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Registrant has duly caused
this report to be signed on its behalf by the undersigned, there
unto duly authorized.
<S> <C>
DATED:
NCC INDUSTRIES INC.
By/s/ FRANK MAGRONE
FRANK MAGRONE
Director, President and Chief
Operating Officer
Date 3-29-95
By /s/ PETER MUEHLBAUER
PETER MUEHLBAUER
Vice President-Finance,
Treasurer and Chief Financial
Officer
Date 3-29-95
Pursuant to the requirements of the Securities Exchange Actof 1934, this
report has been signed below by the following persons onbehalf of the
Registrant and in the capacities and on the date indicated:
<S> <C>
/s/ FRANK MAGRONE 3-29-95 /s/ ANGELO SANGUEDOLCE 3-29-95
FRANK MAGRONE Date ANGELO SANGUEDOLCE Date
Director, President, Director, Executive Vice
Chief Operating Officer President
/s/ GUENTHER SPEISSHOFER 3-29-95 /s/ OTMAR DREHER 3-29-95
GUENTHER SPIESSHOFER Date OTMAR DREHER Date
Director, Chairman of the Board Director
/s/ RUDOLF GROETZINGER 3-29-95
RUDOLF GROETZINGER Date
Page 47
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_____________ Page
<S> <C> <C>
2 Omitted (Inapplicable). *
3(i) (1) Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3(a) of
Registrant Form 10-K for the Year ended
December 31, 1980).
(i) (2) Amendment to Certificate of Incorporation *
of Registrant, dated June 13, 1986 (incorpo-
rated by reference to Exhibit 3(c) of
Registrant's Form 10-K for the year ended
December 31, 1986).
(ii) Bylaws of Registrant (incorporated by *
reference to exhibit 3(b) of Registrant's
Form 10-K for the year ended December 31, 1980).
4 Option and Technical Assistance Agreement, *
dated December 22, 1981, between Registrant
and TIHK, including Exhibit A thereto (in-
corporated by reference to Exhibit 4(b) to
Registrant's Form 8-K, filed January 11, 1982).
9 Omitted (Inapplicable).
10(a) (1) Line of Credit Commitment Letter, dated *
July 12, 1991 form Chemical Bank to Registrant,
together with master Note, dated October 21,
1991, relating thereto (incorporated by reference
to Exhibit 10(i) of Registrant's Form 10-Q
for the quarter ended September 28, 1991).
(2) Line of Credit Commitment Letter, dated *
August 27, 1991 from Marine Midland Bank, N.A.
to Registrant (incorporated by reference to
Exhibit 10(ii) of Registrant's Form 10-Q for the
quarter ended September 28, 1991).
____________________
*Incorporated by Reference
Page 48
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_______________ Page
<S> <C> <C>
(3) Line of Credit Commitment Letter, *
dated September 26, 1991 from Norddeutsche
Landesbank to Registrant, together with
Revolving Credit Note, dated September 26,
1991, relating thereto (incorporated by
reference to Exhibit 10(iii) of Registrant's
Form 10-Q for the quarter ended September 28,
1991).
(4) Letter Agreement, dated July 30, 1991,
between Registrant and Bratex Dominicana, C.
por A. ("Bratex"), providing for a loan to
Bratex and for the provisions of product
assembling, sewing, packaging and shipping
services for Registrant by Bratex (incorporated
by reference to Exhibit 10(a)(5) of Registrant's
Form 10-K for the year ended December 31, 1993).
(5) Letter Agreement, dated November 19,
1992, between Registrant and Bratex, providing
for an additional loan to Bratex for the
packaging and shipping services for Registrant
by Bratex (incorporated by reference to Exhibit
10(a)(6) of Registrant's Form 10-K for the year
ended December 31, 1993).
(6) Letter Agreement, dated as of June 18,
1993, between Registrant and Bratex, providing
for additional loans and advances to Bratex
and for the provision of product assembling,
sewing, packaging and shipping services for
Registrant by Bratex (incorporated by reference
to Exhibit 10(a)(7) of Registrant's Form 10-K
for the year ended December 31,1993) .
10(b) (1) Agreement, effective January 1, 1985, *
between Registrant and TIHK, providing for
interest to be paid to TIHK by Registrant on
money advanced by TIHK to Registrant
(incorporated by reference to Exhibit 10(b)(1)
of Registrant's Form 10-K for the year ended
December 31, 1984.
(2) Lease of New York, New York property at *
465 Park Avenue, (incorporated by reference to
Exhibit 10(b)(3) of Registrant's Form 10-K for
the year ended December 31, 1991).
___________________
* Incorporated by reference.
Page 49
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_______________ Page
<S> <C> <C>
(3) Shareholders' Agreement, dated as of *
July 1, 1986, among Frank Magrone, TIHK
and Registrant (incorporated by reference to
Exhibit 10(b)(4) of Registrant's Form 10-K
for the year ended December 31, 1986).
10(c) (1) Employment Agreement between Registrant *
and Angelo Sanguedolce, dated July 1, 1988
(incorporated by reference to Exhibit 10(c)(6)
of Registrant's Form 10-K for the year ended
December 31, 1988).
(2) Employment Agreement between Registrant *
and Peter Muehlbauer, dated as of January 1,
1991 (incorporated by reference to Exhibit
10(c)(8) of Registrant's Form 10-K for the
year ended December 31, 1990).
(3) Amendment to Employment Contract, dated *
as of July 1, 1993, between Registrant and
Angelo Sanguedolce (incorporated by reference to
Exhibit 10(c)(9) of Registrant's Form 10-K for the
year ended December 31, 1993).
(4) Employment Contract between Registrant *
and Peter Muehlbauer, dated as of January 1,
1994 (incorporated by reference to Exhibit 10(c)
(10) of Registrant's Form 10-K for the year ended
December 31, 1993).
(5) Letter Agreement, between Registrant and *
Intimate Apparel Designs Incorporated, dated
February 25, 1994, with respect to services
of Arthur Rubin (incorporated by reference to
Exhibit 10(c)(11) of Registrant's Form 10-K
for the year ended December 31, 1993).
10(d) (1) Installment Sale Agreement, dated as of *
August 1, 1988, between the Cortland County
Industrial Development Agency (the "IDA") and
Registrant (incorporated by reference to
Exhibit 28(a)(1) of Registrant's Form 10-Q for
the quarter ended October 1, 1988).
(2) Amendment to Installment Sale Agreement, *
dated as of September 1, 1998, between the IDA
and Registrant (incorporated by reference to
Exhibit 28(a)(2) of Registrant's Form 10-K for
the year ended December 31, 1988).
____________________
* Incorporated by Reference
Page 50
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_______________ Page
<S> <C> <C>
10(e) (1) Trust Indenture, dated as of September 1, *
1988, between the IDA and Key Trust Company
(the "Trustee"), approved and consented to by
Registrant (incorporated by reference to Exhibit
28(b)(2) of Registrant's Form 10-Q for the
quarter ended October 1, 1988).
(2) Irrevocable Transferable Letter of Credit, *
dated September 30, 1988, from Norstar to the
Trustee for the account of Registrant (incor-
porated by reference to Exhibit 28(b)(3) of
Registrant's Form 10-Q for the quarter ended
October 1, 1988).
(3) Series A Credit and Reimbursement *
Agreement, dated as of September 1, 1988,
between Registrant and Norstar (incorpor-
ated by reference to Exhibit 28(b)(4) of
Registrant's Form 10-Q for the quarter
ended October 1, 1988).
(4) Series A Mortgage, dated as of September 1, *
1988, from the IDA and Registrant to the Trustee
and Norstar (incorporated by reference to
Exhibit 28(b)(5) of Registrant's Form 10-Q
for the quarter ended October 1, 1988).
____________________
* Incorporated by Reference
Page 51
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_______________ Page
<S> <C> <C>
(5) Series A Pledge and Assignment, dated as *
of September 1, 1988, from the IDA to the
Trustee, acknowledged by Registrant (incor-
porated by reference to Exhibit 28(b)(6) of
Registrant's Form 10-Q for the quarter
ended October 1, 1988).
(6) Series A Guaranty, dated as of September 1, *
1988, from Registrant to Norstar (incorporated
by reference to Exhibit 28(b)(7) of Registrant's
Form 10-Q for the quarter ended October 1, 1988).
(7) Tax Regulatory Agreement, dated October 6, *
1985, for Registrant for the benefit of the IDA,
the Trustee and Norstar (incorporated by
reference to Exhibit 28(b)(8) of Registrant's
Form 10-Q for the quarter ended October 1, 1988).
(8) Bond Purchase Agreement, dated September 29, *
1988,among the IDA, Registrant, Norstar and First
Albany Corporation (incorporated by reference to
Exhibit 28(b)(10) of Registrant's Form 10-K for the
year ended December 31, 1988).
11 Omitted (Inapplicable).
12 Omitted (Inapplicable).
13 Omitted (Inapplicable).
16 Omitted (Inapplicable).
18 Omitted (Inapplicable).
21 Subsidiaries of Registrant (incorporated by *
reference to Exhibit 22 of Registrant's
Form 10-K for the year ended December 31,
1991).
22 Omitted (Inapplicable).
23 Omitted (Inapplicable).
24(a) Resolution of the Board of Directors of Triumph *
adopted on January 11,1989 authorizing Barry A.
Adelman to sign for filing of behalf of Triumph
all documents required pursuant to federal
securities laws (incorporated by reference to
Exhibit 25(a) of Registrant's Form 8-K dated
April 20, 1989).
____________________
* Incorporated by reference
Page 52
</TABLE>
<TABLE>
EXHIBIT INDEX
Exhibit No. _______________Description_______________ Page
<S> <C> <C>
(b) Power of Attorney, dated January 21, 1989, *
pursuant to which Mr. Guenther Spiesshofer
appointed Barry A. Adelman as his attorney-in-
fact to sign for filing all documents required
pursuant to federal securities laws (incor-
porated by reference to Exhibit 25(b) of
Registrant's Form 8-K dated April 20, 1989)
27 Financial Data Schedule 54
28 Omitted (Inapplicable).
99 Omitted (Inapplicable)
Page 53
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,034,820
<SECURITIES> 0
<RECEIVABLES> 16,448,704
<ALLOWANCES> 0
<INVENTORY> 39,104,654
<CURRENT-ASSETS> 58,591,095
<PP&E> 11,186,318
<DEPRECIATION> 0
<TOTAL-ASSETS> 71,588,003
<CURRENT-LIABILITIES> 23,442,312
<BONDS> 2,361,415
<COMMON> 4,866,841
0
0
<OTHER-SE> 31,116,807
<TOTAL-LIABILITY-AND-EQUITY> 71,588,003
<SALES> 128,042,422
<TOTAL-REVENUES> 128,042,422
<CGS> 95,503,504
<TOTAL-COSTS> 95,503,504
<OTHER-EXPENSES> 22,674,374
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,634,346
<INCOME-PRETAX> 8,230,198
<INCOME-TAX> 2,329,186
<INCOME-CONTINUING> 5,901,012
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,901,012
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
</TABLE>
